EUR/GBP consolidating after two-days of sharps up-surge, dips to 0.8300

The EUR/GBP cross has managed to recover from an early dip below 0.8300 handle and is now seen consolidating above 0.8300 handle, digesting its sharp up-surge of over 700-pips in just two-days.

In the aftermath of a historic referendum, where Britons decided to leave the European Union, the British Pound remained under intense selling pressure across the board. Adding to this, S&P Global Ratings lowered UK's credit rating by 2 notches to AA, down from AAA, with a negative outlook, exerted further downside pressure on the British Pound and assisted the EUR/GBP cross to build on to its weekly bullish gap on Monday and extending its strong upward trajectory for second day in a row. 

On Tuesday, a slight improvement in global risk appetite is helping the shared currency and the British Pound to register a tepid recovery, restricting some big moves for the EUR/GBP cross. However, given the uncertainty surrounding the implication of Brexit referendum on the UK economy is likely to limit any sharp downslide for the cross. 

Markets now shift their focus on the European parliament's special session on Brexit and on a two-day European Council meeting in Brussels to discuss the proceeding over U.K.'s decision to end its membership with the European Union.

Technical levels to watch

On a sustined weakness below 0.8300 handle, the pair seems to drift towards testing 0.8225-20 horizontal support before heading towards filling Monday's price-gap and drop to 0.8185 support area. On the flip side, momentum above 0.8350 seems to lift the pair immediately towards March 2014 highs resistance around 0.8400 round figure mark. A convincing strength above 0.8400 would now pave way for further appreciating move for the pair in the near-term.